Every company strives to build greater engagement and loyalty with customers, because customer lifetime value drives revenue and profitability. Ideally, our customers are committed to our brand, and no longer consider substitutes.
We are seeing more and more consumers establishing these “forever transactions” with their favorite companies, agreeing to subscription payments and sharing of personal data in exchange for a promise of huge value.
Technology is extending the infrastructure of trust, making it increasingly easy for organizations to establish relationships across time and space. We all, as human beings, strive to belong. We want to be recognized and held in high regard by our peers. Organizations can provide this sense of belonging and esteem, driving customers to become members, truly committed to the brands they love.
But it’s also about a trusted relationship where the customer feels known and recognized and expects candor, integrity and continuous evolution from the organization. In exchange for a deeper relationship, customers are willing to pay forever, and stop considering other options.
Love Your Customers More Than Your Products And Services
Your whole organization needs to be focused on the constantly evolving needs of your target customers as it relates to your mission; as well as the changing possibilities regarding how to create, package and deliver that mission.
For example, the AARP’s mission is to improve the quality of life for Americans over 50. One of their initiatives was to develop a tablet device for seniors since none of the major manufacturers was willing to do so. When I asked what they’d do if Amazon responded to the new product entry by immediately launching a Kindle for seniors at half they price, the AARP team said they’d be happy – because the mission was being achieved.
What if everyone was that willing to evolve products to stay relevant?
Invest In Onboarding New Customers For Forever Transactions
The transaction is the starting line, not the finish line, in your relationship with customers. Optimize their early interactions to ensure they get an immediate benefit and make your offering part of their daily routine. People decide in the first few days after purchase whether or not they’re going to use what they’ve bought. Take Kurbo, the weight loss app and program for kids, for example. It has games to engage kids in behaviors that will drive weight loss, and rewards them for learning the principles of healthy eating to drive usage until the natural outcome (weight loss) can take effect.
Create A Culture That Values Retention More Than Acquisition
Mastering the forever transaction depends on a core culture that is focused on the long term. Many companies pay lip service to the importance of loyalty while rewarding team members for new customers, logos and building awareness. But retention drives referrals, learning and lifetime customer value. The best organizations start at the bottom of the sales funnel. They make sure their customers can give feedback, get support from their peers, and learn about new ways to get value through new and existing products or services.
Through their huge Dreamforce conference, their innovative MVP program for their most loyal customers and their online community, Salesforce.com has developed such a culture. And through it, enjoys loyalty from their customers that is often greater than the loyalty their customers feel toward their own employers. A vendor gaining greater loyalty than an employer? That’s something to emulate!
Consider Many Tactics To Master The Forever Transaction
Every one of us knows that loyalty matters. We understand that it works for both the customer and the organization. The hard part is the HOW. Here are a few places that I look to identify tactics to help organizations fully join the Membership Economy.
Rethink people and processes to support forever. Salespeople should be rewarded for lifetime customer value, not new logos. Language should talk about members, not customers. Mission should drive product development. And so on.
The acquisition funnel should actually be an hourglass, with revenue growing after the point of transaction.
Onboard members so they can be successful!
Pricing should be clear and make it easy for buyers to buy. Think about what would be in your customer’s best interest and bundle that together in a way that continues to deliver on the value promise forever, not just for a moment in time.
Consider how free might fit into your model. Maybe free is a way of driving awareness and trial. But it could be valuable as a driver of a network effect, increasing the value for existing members with each new member. Or maybe your freemium members, the ones who get a subscription for free forever, are actually bringing in new members, serving as a channel for viral marketing, as with SurveyMonkey or Hotmail.
Technology is for everyone. Just as you expect employees to be able to communicate verbally and in writing – you should expect them to be fluent in the technologies that help them strengthen the value you provide to your customers, forever.
7. Customer Success
Finally, invest in your customers’ success. Be willing to keep changing your products and services to keep them happy, and make sure they know. Keep creating new opportunities for your engaged customers to increase engagement, while catching the disengaged well before they start looking for the cancel button! Don’t confuse intertia for loyalty.
Loyalty doesn’t come cheaply. It requires a commitment to continuous innovation, a culture that treats customers like members, and an emphasis on retention. But organizations that optimize for engagement, as opposed to chasing the transaction, will find success and profitability in the long term relationships they develop.